TECH STOCKS: AMD, Google Lead Tech Rally

By Benjamin Pimentel

The tech sector began the week with modest gains on Monday, powered by advances in shares of Google Inc. and Advanced Micro Devices.

Investor interest in AMD and arch-rival Intel also heightened as the two chip behemoths geared up for their quarterly reports, with analysts anticipating signs of a strengthening semiconductor market.

AMD (AMD) was up more than 5% as UBS upgraded the chip maker's rating to buy from neutral, citing improving PC demand and other factors.

Analyst Uche Orji said the upgrade was based partly on "improved near term expected growth as our recent checks show that a PC market tailwind is lifting both Intel and AMD."

Intel (INTC), which reports quarterly results on Tuesday, was up 1.7%. AMD is scheduled to report on Thursday.

Bank of America/Merrill Lynch analyst Sumit Dhanda urged investors to "think big" in anticipation of upbeat results from Intel, the world's biggest semiconductor company.

"Sales are poised to exceed expectations," Dhanda said in a note, adding that investors should "expect outlook well ahead of consensus."

Meanwhile, Google Inc. (GOOG) gained more than 1.5% as three brokers raised their price estimates for the Internet giant.

"Discussions with advertising agencies, including a dinner we hosted with senior agency executives, point to rising spending on Google since June, led by travel, clothing and home improvement advertisers," Goldman Sachs analyst James Mitchell said in a note.

The Nasdaq Composite Index (RIXF) was up 0.4% at 2,147, while the Morgan Stanley High Tech 35 Index (MSH) rose 0.5%. The Philadelphia Semiconductor Index (SOX) was ahead 1.7%.

Other major tech players advanced, including Oracle Corp. (ORCL), Microsoft Corp. (MSFT) and Juniper Networks (JNPR).

Meanwhile, SanDisk Corp. (SNDK) fell more than 2% as UBS downgraded the chip maker's rating to sell from neutral, citing pricing pressures and "a seasonal demand peak in October/November that could limit further average selling price increases."

Also in the red were Nvidia Corp. (NVDA), Dell Inc. (DELL) and Amazon.com (AMZN).